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tv   The Kudlow Report  CNBC  February 28, 2014 7:00pm-8:01pm EST

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moment for the crew! i like to say, there's always a bull market somewhere. i promise to try to find it just for you right here on "mad money." i'm jim cramer and i will see you monday! the world came to russia for the olympic games and inactivity condemnation from nations around the world and the united states will stand with the international community in affirming there will be costs for any miltd intervention in the ukraine. >> did president obama draw another red line? did he threaten vladimir putin? he spoke out just two hours ago on the deteriorating situation in ukraine. news of russian troops on the ground spooked the markets and the rest of the west much we'll have a live report just ahead. national outrage grows over new york city mayor de blasio's decision to pull the plug on high performing charter schools. millions of minority families
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see charter schools as the only way out of educational and economic poverty. a new study seems to show sec staffers are selling stocks just before sec investigations of those companies are announced. either way, here's the big question. why are sec staffers allowed to trade individual stocks at all? all those stories much more coming up on "the kudlow report" beginning right now. welcome to "the kudlow report". i'm larry kudlow. we're live here at 7:00 eastern, 4:00 pacific. two in one crimea, the ukraine where 2,000 russian troops moved in and what new government in kiev is calling an arms invasion. nbc news steve handelsman joins us now with more. good evening, steve. >> reporter: good evening. headline is definitely those russian troops, medium size
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force newly in ukraine. the question is, what is vladimir putin's plan? the day began with just a few russian troops seizing control of a pair of airports in crimea, southern ukraine, an area historically linked to russia with mostly russian speakers and a big russian naval place. then plane full of russian troops began flying in maybe 2,000 could be more said u.s. officials. russians earlier told secretary of state kerry they would not invade ukraine and said this troop movement was allowed in a treaty they previously had with ukraine but president obama came to the white house briefing room to urge putin to stop. >> any violation of ukraine's sovereigncy and territorial integrity would be deeply destabilizing which is not in tint of ukraine, russia or europe. it would represent a profound interference in matters that must be determined by the ukrainian people.
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most here agree there's little the u.s. can do or some say even should do since we need putin's cooperation on issues more critical to the u.s. than ukraine like iran and syria and north korea and guessing by some here putin will not send masses of troops into the central part of ukraine. world will be watching, larry, to see if russian troops in the crimea act like invaders or peacekeepers. back to you. >> putin has double crossed us in most of those place us mentioned particularly syria and iran to a lesser extent but still north korea. i want to know, you mentioned this, first time i heard about it. russia is saying they have some kind of treaty with ukraine? >> reporter: that's what they are saying. >> that allows them to put troops in? >> reporter: keep in mind they have a big base there. and i mean it's a little bit, not much like but a little bit like guantanamo and cuba except we don't have good relations with cuba and russia had until a
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few days ago pretty good relations with the central government in ukraine. in that whole area they speak russian, there are russian soldiers, airmen around all the time. they say the russians say there's an agreement that allows them to send in troops. that doesn't mean they can invade a sovereign nation. they are still claiming, larry, they respect ukraine's territorial sovereignty. but they got troops in there tonight. >> steve handelsman, thanks very much. we appreciate it. now stocks did react to this you rain news today. bob pisani joins you now with the details. good evening, bob. >> reporter: hi, larry. stocks rocketed into record territory right after the open on better consumer sentiment and chicago manufacturing data but at one point late in the day they gave up all their gains. traders cited two reasons. headlines from the acting president of the ukraine which accused russia of aggression against the crane, the situation there is very fluid. another potential factor was the
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last trading day of the month. that often sees dips late in the day as traders rebalance their portfolios. stocks bounced back in the last hour. s&p 500 closed at a record high but russell 2000 big selling in tech and pharmaceutical. that's index ended down. a wild ride. s&p moved in a 20-point range from its highs to its low. this is the problem. a little bit of a disconnect between stocks at a new high and economic data that's still mostly disappointing and then throw in an old school potential cold war crisis and you got big price swings. larry, have a good weekend. all right. many thanks to bob pisani. returning now to the situation in the ukraine, reports say russian troops have, in fact, moved into the crimea. we welcome back don jensen. and cnbc's own chief international correspondent, michelle caruso-cabrera. don't let me go there.
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weeng last night that the crimea may be the very center of this whole story. now let me just ask you. is this idea of a treaty with ukraine, that russia can put troops in to protect their military assets in crimea. is that what they are saying >> there's three treaties governing this and the russians are splitting hairs. the russians have a treaty to guarantee the territorial integrity of the ukraine which they signed with the u.s. in 1994. the russians also have a long base agreement with ukraine to keep the black sea fleet there. how this is interpreted in practice, of course, is what we're arguing about today. there's no question that they moved around in a provocative way. do i think it's not a full scale invasion. but it's going to be an irritant. something that will be able to provoke the ukrainians, giving the russians a chance to
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interfere. they expect more provocations tonight against ukrainian forces by russian troops at the crimea. >> michele i am sure you heard the president. what did he mean. lot of strong rhetoric. if the russia violates ukraine sovereignty there will be costs, et cetera, et cetera. grave mistake for russia to interfere. he didn't thankfully use the term red line but it isn't clear to me what is he talking about here? >> reporter: i'm not sure he's talking about much. there's no stomach in this country, any americans or the president who wants to go to war over crimea in the ukraine, a country with very minimal economic impact in the western world, the vast majority of their trade is with russia. if they continue to provoke russia, what's going to happen likely is that russia will also do things economically. they have immense economic power over ukraine. half of all ukrainian exports go
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russia, that's where they get the foreign exchange reserves which they are getting low. if russia decides to impose costs on their imports saying your tractors don't meet our safety requirements that will be painful to you crane. russia can up the price of natural gas sharply. remember the west is promising a bail out. so every cost that russia imposes on ukraine is going to get paid for monetarily by the west. >> all right. you're right about that. they could literally turn off the natural gas. don jensen back to you. if putin mounted some large scale invasion the reports are 2,000 troops. those reports are not necessarily totally confirmed. i don't know what we really know. let's assume worst case. let's assume that putin puts a lot of troops into the ukraine for whatever reason, take it over, take the east ukraine over, i don't know what. won't the whole world turn
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against putin and putin doesn't want that because he had a renewed period of influence. everybody would go against putin if he actually invade the ukraine. >> to a certain extent you're correct, larry but he's doing this in part because key. western red lines don't have much credibility in the kremlin these days and as michele said there are a lot of ways that the kremlin can push further without provoking the west, provoking ukraine without fear of a credible response. excuse me. i think what we're seeing here is the stationing of troops on the ground to change the facts on the ground and going to be a referendum in the crimea in may it looks like and those people largely russian can vote to secede from ukraine, no one will be able to stop them and you'll have 2,000 troops in the area as well as the fleet to back up the vote to leave ukraine. >> michele, there's a lot of bad blood between the old soviet union and eastern ukraine and
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there's also a lot of bad blood between the old soviet union and the crimea. i mean there were persecutions, there were killings. it's not as though this is a happy situation for almost anybody and i'm not hearing people in the ukraine say they want to secede. >> reporter: it depends. if you were to look, larry, at the break down of voting in the last election in the ukraine you could literally slice it down the middle. west, obviously, was anti-viktor yanukovych and the east was absolutely pro viktor yanukovych. so yes there's a lot of bad blood from the old soviet days but you have a lot of ethnic russians on the ground. there's a minority but it's a minority and they don't have a lot of power at this point. >> last one, don jensen, quickly. why is this important? why is this whole story important? ukraine is just a nothing little economy. no financial implications. not going drive all the emerging
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markets down. we had this discussion last night. why is this important? >> this is important for two reasons. first because if you care about democracy i think it's important that people around the world share our values. democracies are less aggressive and hostile to the u.s. than dictatorships and second ukraine is the key part of a broader putin project to establish an alternative military, economic and political bloc in so-called eurasia which he sees as a direct challenge to the west. for that reason ukraine is central to his plans. >> reporter: when you talk about ukraine being a tiny economy, there's a reason for that. if you look at the polish economy versus the ukrainian economy since the fall of the soviet union, poland ran as fast as it could towards the free markets, ukraine did not. and when you look at the gdp per capita, ukraine now today stands at less than $4,000 whereas in poland it's higher than $25,000. so you care not just about
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democracy but economic freedom it matters. >> i think you're right. i think you're both right. i think that's why the majority of people in the ukraine would like to go with the eu and imf. got to get the money. we'll wait and see. merkel is on the phone with putin. nobody has any idea what the conversations are like, if money involved with the government in kiev or not. thanks to both of you. don jensen and michelle caruso-cabrera. we got a big time a-list debate, forbes media chairman steve forbes and roy hewitt will go on the tax reform plan. and mayor bill de blasio acting like a sandanista. shutting the door on three charter schools and hundreds of kids in new york city. american parents see charter
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schools as the only way out of poverty for their kids and mostly minority kids at that. we will have the latest on that. meanwhile don't forget free market capitalism is the best path to prosperity. economic freedom and democracy may be at stake in the ukraine. that's why it's important. i'm kudlow and we'll be right back. vo: once upon a time there was a boy who traveled to a faraway place where villages floated on water and castles were houses dragons lurked, giants stood tall, and the good queen showed the boy it could all be real. avo: whatever you can imagine, all in one place.
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it hasn't been done since 1986 when my old boss ronald reagan was in the white house. this week the top gop tax writer in the house ways and means chair dave camp came on our show to unveil a broad pro growth plan. it would pare back tax rates, tax breaks, simplify the tax code. but it's getting the cold shoulder from leaders of his own party and facing tougher criticism from conservatives. joining us now, steve forbes. chairman of forbes media and we have syndicated radio host hugh hewett author of the book "the happiest life." gee whiz i know there's some tweaks, lower rates, fewer rates, cutting the corporate
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tax, it's being scored as a big growth and jobs creator. why are you so against this dave camp reform plan? >> well, larry, thanks for having me on. it's not fair tax reform, it's not flat tax reform, it's a foolish tax reform, it's not a reform. it has four brackets. it will tax every american homeowner. it will tax charities that receive asset deductions opinion i want taxes people that make more than a million dollars a year and they are reacting positively with fury. here's what the real problem is. in an election year in which we have 14 competitive senate republican seats it's not on the list of priorities to even begin this debate. people want to repeal obamacare, they want to go after regulatory overreach, they want to rebuild our nation's defenses, they want to be worried about entitlement reform and immigration reform. what dave camp did is introduce a giant side show that outrages much of the base and advantage of being a talk show host as you
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know sue hear from people and the phones lit up. people are angry that dave camp wants to raise their taxes and give them nothing in return. >> steve forbes, hewitt is seeing this as a tax hike. there are some tax hikes in here. i don't see it as a tax hike. maybe more broadly the republican party has to have a pro growth message and i think the tax reform message can work. this may not be perfect but where do you come out on this. >> i think putting tax reform on the table is good. i have some questions about what dave camp has done, that 35% bracket and raising the taxes on capital gains and dividends. by raising the standard deduction 95% of the people won't have to file a complicated return. corporate tax rate gets cut from 35 to 25. that's good. there's good elements. i see it as a building block ultimately to a flat tax because what this under scores this is a
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man who is trying to simplify the code but it took 1,000 pages to do it just as it did in 1986. putting it on table is a positive. it shows there's a lot of room. even with the cbo's crazing scoring he has $700 bill thrown play with in the sense of reducing taxes further. >> cbo, dynamic scoring for change, lower tax rates, more incentives to work and invest. they actually said you could get 1 to 1.5% more gdp growth per year, per year which would put us in the 3.5, 4.5% zone we ought to be. i'm impressed with that. they wouldn't have made that if camp's plan was as bad as hugh says it is. >> push be cbo to recognize growth comes from taxes and so, again, this sets the stage for real reform. what will happen, larry is what happened in '86 one the sense when they started to attack tax
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shelters, they realized if you attack one you have to attack all of them. when they go to preferences they realize they have to sweep all of them out and get a radical tax reform. >> hugh, it could be a building block. you mentioned homeowners and i think you mentioned wall street. you're talking about the private equity guys. you know, hugh, loopholes for the well connected, let's start with that on wall street, and this whole housing deduction and other deductions, a few people take advantage of it, the vast majority of the middle class pays tax rates that are too high. i applaud somebody who wants to put a cap on the mortgage deduction. that's what we have to do. yes, do i. >> oh, larry every homeowner will see a 15% drop in their home overnight if you cap the tax deduction.
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that's not the real problem. >> the issue of lower tax rates should more than make up for these deductions. >> larry, that's why it didn't happen in 1986. here we have the two poster guys for tax reform in america, larry kudlow and steve forbes. both saying something nice about a plan that was deceptively rolled out and has four brackets including a soak the rich bracket. this is an occupy wall street plan. >> what's the fourth bracket? >> i can't believe my ears that steve forbes likes this. >> what's the fourth bracket >> the million dollar surcharge. it's 450,000. >> that's third bracket. a bracket on top of that for corporate executives that makes a million bucks. the 29 pages full of little time bombs that they snuck past. you two guys have to stay the course, fair tax, larry, not this special interest shoveling around. >> do i want a fair tax.
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i do want a flat tax. i don't think we should be raising taxes on banks, $80 billion and they shouldn't be raising taxes on oil, energy and other manufacturing companies. the capital cost deductions have been reduced. but as steve said, you're basically -- look, the two basic rates here are 10% and 25%. that's two basic rates. now, i regret that they had to hit higher rates to path surtax on. we wanted that for years. you could leave that 35% rate alone and everybody could have the 15% rate. everybody else could have a 15% rate. i would have preferred he go there. >> i don't take the camp plan as definitive if that was the only thing out there i would take it. in see it as putting something on table, taking all the secrecy away from it. one i want shows the tax code has to be junked but two it
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shows there's a lot of ways you can get massive tax deductions by removing these preferences. if you have a vibrant economy you won't see a 15% decline in housing values. people will buy more houses and move around this country. >> hugh, the gop has to have a growth message. now we can maybe really -- i can tweak -- look i did it on the air. i asked him about a lot of these flaws. the gop has got to have a growth message. the gop was the pessimist in 2012. obama got them on pessimism. obama was the optimism. i know all about obamacare. i get that. but i don't think that's going to be enough, hugh. i'll give the last word. >> we need a growth message. the camp plan isn't a growth message. it's a head fake. they tricked a lot of people. dave camp developed it in secret. he tried to sell it as a two bracket plan. it's a four bracket plan. it's got stuff in it, for
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example, can you no longer donate assets to charities. this has been one of the great tax advantages to our not for profit private-sector. people will go ballistic when they learn that. and homeowners of america will not believe you when they say they will be better off in the end. they plan on that want deduction. >> i understand. spoken like a true representative of the national realtors association, hugh hewitt. that's exactly what they say. i got to go. i love both of you. you both make good points. now, a new report suggests sec staffers are very good at picking the right time to sell stocks. but here's the question, why on earth are the sec employees even allowed to trade anyway. we got the latest on this outrage story next up on "the kudlow report". ♪ turn around
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and saving at the pump you want it all. get our multi-point inspection with a a synthetic blend oil change, tire rotation, brake inspection and more for $29.95 or less. get a complete vehicle checkup. only at your ford dealer. . why are sec employees buying and selling stocks? can you tell me that? two professors found sec employees sold stock in a company right before an sec investigation into that company. the sec is trying to explain this all away. eamon javers has that story for us. good evening. >> reporter: good evening. the study comes from emery university a professor and graduate student there crunched the numbers that they got by the freedom of information act request to the sec of all of the data surrounding sec employees trading in the stock market. their conclusions might be surprising. take a look at some of their
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findings. they found some of their profits potentially stem from trading ahead of sec sanctions. it appears they said the sec employees take advantage of nonpublic information and also that add normal returns stem from sales ahead of price declines. they found that the employees were particularly successful in making sales ahead of news events. the sec is pushing back hard on this saying the employees were ordered in many cases to divest of a whole range of stocks during the same time period that this study was being conducted so a lot of these sales that look suspicious were order by the sec for ethics reasons. they said all stock trades are reviewed and approved by the sec ethics office and pointed out there's a six month holding period for sec employees who have stock. they have to buy it and hold it and that is designed they say to tamp down on any speculative on the stock market. the overall question is why are
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sec employees allowed to buy and sell stocks at all when you consider folks who work at cnbc, for example, are not loallowed do that. president of the united states doesn't buy or sell stocks or the secretary of treasury. other people inside the government say i won't do it, too risky for me, conflict of interest is potentially there. >> eamon javers, thank you very much. is the sec guilty of the insider trading that they are supposed to be policing. here's tom curran. we have -- we have tougher restrictions here. i don't understand why anybody in the sec would be allowed to own individual stocks. >> the irony here is the sec is catching up with some of the ethics rules which the ethics rules for the public companies, the wall street firms, the law firms that service those, the auditors of public companies, they are not to mention cnbc are far more vigorous it turns out
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than the sec's rules are. >> listen to that bs they were giving eamon javers. it's okay, you can hold it for six months. what does that mean. these guys are investigating insider trading through wall street. this is steve cohen. sec is in the same game. you know why? they have better information than steve cohen. you know why? they get to see legal documents. there's something serious hi wrong. >> you didn't bring me on to defend the sec. >> you were a little soft on that. >> let's defend the sec a little bit. >> no. >> they are a little late to the game and it all comes after the madoff scandal in 2009. late to the game in the ethics rules. they are the first ones to judge your ethics rules. >> mine? >> cnbc's, anybody as part of their investigation. now let's hope that -- >> i can't own individual stocks. >> and look they've had trouble -- i don't know who is doing this reviewing the sec had
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trouble. they had to suspend their assistant inspector general for evidently being perceived as threatening. they had some bumps in the road. the thing here is perception and part of the insider trading rules is that this system is fair and if the sec has perceptions and this story was all over the street today. if there's a perception that the sec itself isn't fair who is regulating the regulator. >> i guess that's the press that's the only one opinion the point is here as these two professors figured out it's an odd one that some of these sec staffers seem to always be selling just before a new insider trading or some charge. >> very conduct that will get you a formal order of investigation from the sec. >> so where are the resignations? where are the inside orders? where are the inside investigations? why isn't mary jo white the new sec -- why isn't she in front of
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the press saying we're going to change the whole system? the story came out 24 hours ago. where was she today? >> bloomberg and "the washington post," this story hasn't gotten legs. maybe it will now. maybe they pay attention to it. i don't think the regulator can, they laugh when you say that our company did a self-review. maybe the sec needs bring somebody outside and there was precedent for that, would the sec bring someone in to review their process. >> they can bring in eric holder. >> or somebody. >> have special counsel. they have a special counsel. >> they have my number. >> they can bring in the irs. >> they have my number. >> how about tom curran. thank you very much. he's good. a little soft on this. should be taking action right now. let's move on. charter schools. they have been hailed by millions of minority parents as
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the best way to get their kids out of poverty. why would new york city mayor bill de blasio shut some of them down? hundreds of kids are out. outrage over this is growing nationwide too and we will explain it all. speaking of outrage many say the tea party movement was officially born five years ago this week when our own cnbc colleague rick santelli made this impassion eed rant on air. here's rick back in 2009. >> this is america. how many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills. raise your hand. president obama, are your listening? ameriprise asked people a simple question: in retirement, will you outlive your money?
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in an incredibly bad move that kowtowed to teacher's unions, new york city mayor bill de blasio is blocking three charter schools and hundreds of kids from using space inside public school buildings. charter schools are producing phenomenal performance results. de blasio continues to wear the union label and continues to pose the whole charter school movement. incredible. here now is nina reese.
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welcome. i want to read this factoid. it might have been from your organization. city wide the kids have a 30% proficiency in math and 26% in language. that's city wide. in the success charter network which we're talking about that got closed down, 82% proefficient eprofesiciency in math and 58% in language. why is mayor de blasio waging wars against charter schools. >> this is a mayor who ran on an anti-poverty platform so he's pretty much waging war against a lot of the families who he purported to represent when he was running for the seat as mayor. one thing about the particular school that he's closing, harlem 4 success academy public charter
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school this is one of the best schools in the entire country, 88% of the kids in this school passed the math test. compared to only 5% of the students in ps 123 which is the school that the school is co-located with. comparisons are very stark. >> who are the kids? who are the kids that go to the charter school predominantly. i'm asking you. i'm asking you and ethnic question. who are these kids? >> 73% of them are on the free and reduced lunch program. 92% are african-american and hispanic students. again these are the constituents that mayor wants to represent. >> so, i thought, okay. what did you say 93% are african-american and hispanic. that's an incredible number. they are producing these high performance scores after going to this charter school. so, look. de blasio runs as the hero of
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the left behind. he wants fairness. he wants to tax the rich. and give the money to people who are less fortunate. these are exactly the people who are less fortunate and they are learning like never before. i just don't understand any of this and how he's going to get away with it. >> well the other thing that's appalling about this act is he himself has never visited the school or asked about the student data that we're just talking about. so, at the very least i think he should meet with the community and the families before making such decisions. the families in these schools, the studio audience have been in this school since 2008. you're not talking about a new school that's being created. the other thing that's ironic the democratic party has been a huge supporter of charter schools over the years starting with bill clinton, currently president obama is a huge supporter. the governor of the state of new york, governor cuomo is also a huge supporter. he's defying the leadership of his own party by taking this harsh stance. >> the charter school movement
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is spreading nationwide, is it not? >> it is. we now have charter schools in over 42 states and washington, d.c., serving a little over 2 1/2 million students every day. it's been around now for to 26 years. you're not talking about an experiment, you're talking about an established movement and sector that's very much alive and well. what's interesting about new york city aside from success academies is the growth and the success of the new york city charter school system. you have a good portion of these schools, whereas the schools are only about 6% of the entire population of the city, you are producing some of the best results in the entire nation. studies done by stanford university, by harvard university have consistently shown students in these charter schools are knock it out of the park compared to their counterparts. sneepts to move them. he wants to move them, displace them. close them down because they don't have near as much money as
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the public schools and you were nice but the teachers union has a big hand to play in this. the teachers union has campaigned against charter schools from day one and they have campaigned against performance standards from day one. i got to get out. thank you very much. this is an incredible injustice. now it was a wild up and down ride on wall street today. stocks slugged off a big gdp revision and some other bad news but the ukraine reports almost killed the whole rally. we'll talk about that next up on kudlow. when you order the works you want everything. an expert ford technician knows your car's health depends on a full, complete checkup. the works. because when it comes to feeling safe behind the wheel, going the distance and saving at the pump
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or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. despite ukraine concerns, dow and s&p 500 ended higher on the day, dow added 50 points, s&p 500 gained five bucks and the nasdaq lost 11. let's welcome our guests. jack, i think, we talked about this a little bit last night. obviously ukrainians are worried about what happens to you crane. but ukraine is such a tiny economy, such a tiny economy that it cannot have any lasting effect on our stock market. it just can't. >> larry, it's not the fact that you crane in itself is the
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problem. it's more a question of what's happening with russia, what's happening between the friction that's caused between east and west. we went through 50 years of a cold war. we don't want to see that happen again. if puttin turns into breshnev. >> this is a capitalist country. they have those communist roots. the bottom line is this when you start to see troops build up and hear rumors across the trading floor that soviet troops, russian troops are crossing the border, immediately the reaction is to go and buy protection poir portfolios. >> michael this was the best month for the s&p 500 since
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october. best month in the s&p since october. and that 6% drop in late january is now gone and year-to-date the s&p 500 is up. now i think that's a pretty optimistic given the weather and all the related issues with the economic numbers that's pretty bullish. >> i mean i still see the picture as somewhat mixed. i think the -- you know, yeah. we're getting good data, bad data, it's the weather. the employment numbers are mixed. i think it's really mixed goung forward. i think it's a positive we came out of that selloff. wasn't even a technical correction. but it wasn't a selloff. corporate profits remained reasonable. my estimate of the s&p 50015 times earnings fair not cheap not expensive but fair. >> all right. so are you aboard there right now? >> probably somewhere in between. i think you can make money in stocks. you have to pick the right companies, the right growth industries. the next five years are going to be worst than the last five in
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terms of the types of returns we've seen. >> worse? worse? wait. are you talking about the economy or the stock market. >> stock market. >> i see. but if you get a five year cycle on top of this five year cycle that's a hell of a run. that's a hell of a run. that's 1980s run, 1990s run, bullish long term buy stocks to create wealth run michael. that's what that is. >> if, if, yes i would agree. >> all right. jack, very interesting, gdp was revised lower from 3.2 to 2.4. inside the report, this is bullish. business investment on equipment went up quite a bit. 10.6% versus 7% in the first report for the fourth quarter. now if business investment comes online on stream if you will, jack you'll get a lot more hiring, you're going get a lot more wages, you're going to get a lot stronger economy.
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>> that's the real story, larry. the fact we'll see cap x pick up this year. in hindsight when we look back on this last five years i think what's really going to be amaze cigarette how well the market did in an environment that's been as anti-business as i have ever seen in my lifetime and i think that what you were just saying is absolutely true. i see this more as a spring that's wound up and ready to be unleashed. imagine where we would be if we had a president that was reaganesque that freed up capital, ended up launching new businesses for a new world. so all of that can very well happen and the fact is it can't get any worse in the last five years. >> it's coming, jack. one of the signals. stock market is telling you, the political situation, policy situation they are talking flat taxes now, they are going shut down this obamacare, it's coming jack. keep the faith. thanks to boston you gentlemen. now it was five years ago that
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the tea party was born. will that movement rebond with the rest of the gop and hand republicans control of the senate in november? we'll talk about that next with our political panel. please stay with us. turn aroun♪ ♪ every now and then i get a little bit hungry ♪ ♪ and there's nothing really good around ♪ ♪ turn around ♪ every now and then i get a little bit tired ♪ ♪ of living off the taste of the air ♪ ♪ turn around, barry ♪ finally, i have a manly chocolatey snack ♪ ♪ and fiber so my wife won't give me any more flack ♪ ♪ i finally found the right snack ♪ ♪ i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to and post your job to over 30 of the web's leading job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses
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it's been five years since a group of americans got tired of wasteful spending, high taxes, and out of control national debt. they formed what we now know as the tea party and love it or hate at any time tea party has had a huge impact on politics in
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this country. let's talk. you know, j.p. it's fashionable and establishment in washington and new york to beat up on the tea party but i think the tea party will be closer to the establishment than a lot of other things. i think there's going huge republican wave in the senate. what's your take? >> don't forget if not for the tea party, you probably don't get the 2010 election, you don't get the republicans taking the house, and ever since then the obama agenda has been sometime jipd. there -- stymied. the obama agenda has been stymi denver for that you can thank the tea party. you are looking at another very strong election in 2014. the one counter balance i thought was going to be a strong economy this year but right now
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we're off to a terrible start. >> that detract from the democratic message and chris how do i understand what the democratic message is going to be. it can't be obamacare because that's a catastrophe. it can't be the economy because jimmy p. said it's starting linebacker lu lackluster. most people are off the employment roles. what is the democratic message. >> two parts. one what you're seeing in the earnings fost cuss in the minimum wage and the differences the democrats have between republicans and not, by the way i disagree. it will be about obamacare. they won't run away from it. the notion of trying to run away from it won't work so you have to embrace the positives in terms of the impact it has for individuals, families, allow children on their plans, pre-existing conditions those kind of issues. >> you can't run away from it. >> with all due respect leading democrats tough race democrats are already running away from
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obamacare and the falsehoods the president talked about selling obamacare. j.p. this is the thing. the tea party is energized and monbilized i think by obamacare and it's spending and taxing and most of all, jimmy, it's statism. that's what is it. it is a status health care plan where the president who is making extensions and dictates all the time in an unlawful, unconstitutional way. the tea party hates that. they are constitutional populists. they won't give up on that. it's an interesting different angle. it's not we don't think it will work or lower health care costs. it's also just the way it's being implemented just seems like it's only quasi legal. it is whatever he says it is and if the president says utes something different tomorrow then that's really more like some sort of banana republic.
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>> here's the part to keep in mind. the notion about the tea party being a factor in these elections they might be but remember the last few elections where they've been factor it's been a negative. the republicans would arguably have won seats, senate seats in nevada, indiana, delaware, missouri, in alaska had it not been for the tea party candidates that pushed the debate too far to the right you end up alienating that middle voter. this is part of the problem when it comes to obamacare we had an election in 2012, a national election where it wasn't the deciding factor clearly. now it is going to be a negative? yes. it's not enough for republicans to go out there and say we don't like obamacare. if you don't have a different alternative or different version -- >> it might be enough. the president's approval ratings are dead in the water. if he's sitting with these approval numbers in november he'll be facing a republican
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senate, republican house and if it wasn't dead it will be. >> there's a thing to keep in mind. of course, there's historical tendency in second terms for mid-terms with the president to suffer significant losses. but when you look at the particular races that are playing out, the republicans still have a hard path to get those seats to win back the senate. you have a race in kentucky, for example, where mcconnell sane dead heat in the last recent polls. you have competitive races in all the red states whether you're talking about louisiana, north carolina, this is not a clear advantage. circumstances may change on the ground in the coming months but this notion that this built in republican wave i'm not sure it's there yet. >> i think tea party candidate selection in 2012, 2010 too could have been a lot better. i agree with you. but there's two people coming in here, virginia ed gillespie will
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give mark warner a run for his money. i think the net is widening and i think the tea party is going to be the foot soldier. i think the gop net is actually widening not narrowing. anyway we'll get back to this. this is a long term plan. chris, jimmy p. as always. that's it for this evening's show. thanks for watching. i'm larry kudlow. we'll be back on monday. if ...hey breathing's hard... know the feeling? copd includes emphysema and chronic bronchitis.
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>> tonight on the profit... good morning, i'm marcus. >> nice to meet you. >> i go inside planet popcorn, a multimillion-dollar popcorn business with a huge disney contract. the problem is they don't have any real profits to show for it. you guys are in trouble. the balance sheet is hundreds of thousands of dollars wrong. mismanagement and sloppy accounting have forced the owner to ask her mother to take out a second mortgage on her home just to keep the doors open. obviously, you used the petty cash to buy lottery tickets. >> i did. >> the product is great, and if i can get sharla to listen long enough, i'll turn this unfocused organization into a national brand. my name is marcus lemonis, and i fix failing businesses. if you think that i can launch you in a direction to make you a profit, then you should do a deal with me. i make tough decisions


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